DWD issues 121-page response to critical report-WEB ONLY

The Indiana Department of Workforce Development told
federal overseers yesterday that it has made changes that should cut a rate of
miscalculating jobless benefits that was five times the national average.

The state agency sent a 121-page document to the U.S. Department of Labor
responding to a March report that found 41 cases in which Workforce Development
broke federal rules in areas such as determining jobless benefits and managing
federal grants.

The Labor Department report also found 31 other “areas of concern,” and the
state agency also addressed those in the response released to the media yesterday
afternoon.

Labor had found the state agency was responsible for 11.2 percent of improper
unemployment insurance payments in 2007, or five times the national rate of 2.3
percent.

Workforce Development responded that with the debut of its
IndianaCareerConnect program last July – and a requirement that people filing
unemployment insurance claims register with that Web site – the error rate
should go down.

The state agency said it also has taken other steps to cut down the errors,
including giving closer review to unemployment cases it labeled as
“problematic.”

The federal report has triggered harsh criticism of the state agency at a
time when the state’s preliminary, seasonally adjusted unemployment reached 10
percent in March and the state is paying out hundreds of millions of dollars
more in jobless benefits than it collects in taxes from employers.

Workforce Development Commissioner Teresa Voors, in a cover letter for the
state’s response, said her agency already has taken steps to fix some of the
problems that the Labor Department report identified.

Voors noted the agency immediately canceled a $7 million contract it had
given to Ivy Tech Community College for vocational and academic training and
other services that the Labor Department had criticized for a lack of
accountability.

She also said the Regional Workforce Board in the Elkhart area hard hit by
unemployment has replaced a regional operator whom the federal report had
criticized.

The Workforce Development response, however, was vague on the Labor
Department’s criticism of uneven caseloads for agency case managers that were as
high as 250 in South Bend and 200 in Fort Wayne. The Labor report said the
quality of case management begins falling once a manager’s caseload reaches
100.

The state response blamed the imbalances on fluctuations in the number of
clients using WorkOne Center locations by county.

“This fluctuates based on what is happening within each area at the time,”
the state’s response said. “IDWD will work more closely with the Regional
Operators, Service Providers and Local IDWD staff to determine where and when
adjustments need to be made for case load management and provide additional
resources, if necessary.”

Rep. Russ Stilwell of Boonville, the Indiana House Democratic floor leader
and a member of the Labor Committee, said he was pleased that Workforce
Development officials had completed the response and the “internal look at
themselves” that the Labor Department called for.

Stilwell also noted that a new law aimed at fixing the state’s unemployment
insurance fund includes a provision for lawmakers to provide oversight of the
state agency.

“We will be reviewing DWD compliance on unemployment insurance benefits in a
timely manner, ensuring they are not sent to folks who are not entitled,”
Stilwell said.

Another critic of the agency, Indiana Manufacturers Association Vice
President Brian Burton, called this week for Workforce Development to be held
accountable to complete the improvements it promised in its response to the
Labor report.

Burton said yesterday that state Senate Republicans have estimated the new
unemployment insurance law includes about $300 million per year in cost-cutting
changes at the state agency. If implemented five years ago, he said those
changes could have provided $1.5 billion in savings that would more than cover
the hundreds of millions of dollars the state has had to borrow from the federal
government to keep the unemployment fund solvent.

“We certainly wish this had been done years ago,” Burton said, speaking for
the manufacturers group.

As of late April, Indiana had borrowed nearly $800 million from the federal
government to keep the fund solvent. As of Wednesday, the outstanding loan
balance stood at $636.4 million.

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